Technical efficiency and productivity analysis in Indonesian provincial economies
This article estimates inefficiency and Total Factor Productivity (TFP) across Indonesian provinces from 1993 to 2000. Indonesia is a large emerging market economy, but provinces within the country (due to the island structure of the country) are more distinct from one another compared to other countries. We use a stochastic frontier methodology to estimate inefficiency and TFP. We find that TFP fell by an average rate of 7.5% across provinces due to the decrease in technical efficiency. In fact, the majority of output growth within Indonesia is explained by the accumulation of inputs. In this sense, economic growth within Indonesia does not appear to be sustainable without reversing these trends.
Volume (Year): 43 (2009)
Issue (Month): 6 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-1039, December.
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
- Sangho Kim & Young Hoon Lee, 2006.
"The productivity debate of East Asia revisited: a stochastic frontier approach,"
Taylor & Francis Journals, vol. 38(14), pages 1697-1706.
- Young Hoon Lee & Sangho Kim, 2004. "The Productivity Debate of East Asia Revisited: A Stochastic Frontier Approach," Econometric Society 2004 Far Eastern Meetings 776, Econometric Society.
- Mercedes Gumbau Albert, 1998. "Regional technical efficiency: a stochastic frontier approach," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 723-726.
- Shandre Mugan Thangavelu & Gulasekaran Rajaguru, 2004. "Is there an export or import-led productivity growth in rapidly developing Asian countries? a multivariate VAR analysis," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1083-1093.
- Wu, Yanrui, 2000. "Is China's economic growth sustainable? A productivity analysis," China Economic Review, Elsevier, vol. 11(3), pages 278-296.
- Jaume Puig-Junoy, 2001. "Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach," Journal of Regional Science, Wiley Blackwell, vol. 41(1), pages 75-96.
- K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
- Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
- Patricia E. Beeson & Steven Husted, 1986. "Patterns and determinants of inefficiency in state manufacturing," Working Paper 8603, Federal Reserve Bank of Cleveland.
- Chien-Chung Nieh, 2002. "The effect of the Asian financial crisis on the relationships among open macroeconomic factors for Asian countries," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 491-502.
- Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
- Rubiana Chamarbagwala & Sunder Ramaswamy & Phanindra Wunnava, 2000. "The role of foreign capital in domestic manufacturing productivity: empirical evidence from Asian economies," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 393-398.
- Mercedes Gumbau-Albert, 2000. "Efficiency and technical progress: sources of convergence in the Spanish regions," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 467-478.
- Lee C. Adkins & Ronald L. Moomaw & Andreas Savvides, 2002. "Institutions, Freedom, and Technical Efficiency," Southern Economic Journal, Southern Economic Association, vol. 69(1), pages 92-108, July.
- Gregory Brock, 2001. "An Econometric Look at Inefficiency Among U.S. States, 1977-1986," The Review of Regional Studies, Southern Regional Science Association, vol. 31(1), pages 95-107, Summer.
- Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
- M. Renuka & K. P. Kalirajan, 1999. "On measuring total factor productivity growth in Singapore's manufacturing industries," Applied Economics Letters, Taylor & Francis Journals, vol. 6(5), pages 295-298.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
- Piesse, Jenifer & Thirtle, Colin, 2000. "A Stochastic Frontier Approach to Firm Level Efficiency, Technological Change, and Productivity during the Early Transition in Hungary," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 473-501, September. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:43:y:2009:i:6:p:663-672. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.